Asian Stock Market: Traders jostle amid thin liquidity on Japan holiday, China defends bulls


  • Asia-Pacific shares dribble amid a lack of major catalysts, off in Japan.
  • China tries to defend struggling developers, Evergrande bond coupon payment looms while Shimao fastens asset sales.
  • Australia Building Permits improved in November, covid woes escalate.
  • Light calendar keeps traders on the edge after Friday’s US jobs report tested Fed hawks ahead of this week’s inflation.

Asian equities fluctuate within a minor range during early Monday as the regional leader Japan celebrates the Coming-of-Age Day holiday. Also challenging the market moves are mixed concerns over the short-term outlook of Friday’s US employment data and China’s efforts to battle the covid and financial crisis.

That said, MSCI’s index of Asia-Pacific shares ex-Japan rises 0.30% but the S&P 500 Futures remain pressured despite reversing most of the early Asian session losses.

“Officials in Guangdong province are facilitating meetings between struggling developers and SOEs to encourage mergers and acquisitions, according to a report by Cailian,” per Bloomberg. The news also cited Evergrande’s plan to delay the early interest repayment option on its one-year bond. Further, China’s Shimao group is selling its assets and tames the fears of a financial market crackdown.

It’s worth noting that the virus woes escalate in Asia-Pacific, as well as abroad, with multiple countries reporting all-time high daily COVID-19 infections and death tolls. Even so, hopes of US stimulus and China’s readiness to keep the markets liquid favor bulls.

Looking backward, Friday’s US employment details for December confused markets as the headlines Nonfarm Payrolls (NFP) disappointed bulls but Unemployment Rate and U6 Underemployment Rate reached pre-pandemic levels.

Elsewhere, Australia’s Building Permits for November rose past -12.9% prior and 0.0% expected to +3.6% MoM.

Amid these plays, ASX 200 prints mild losses while New Zealand’s NZX 50 drops 0.80% as fears of virus spread in Auckland gets more attention. Chinese equities print mild gains and so do shares from Indonesia, South Korea and India.

Additionally, the US Dollar Index (DXY) licks its wounds while commodities remain depressed while consolidating the previous day’s gains.

Moving on, this week’s US Consumer Price Index (CPI) will be crucial for markets as the bets on the Fed rate hike during March 2022 remain near 80% while Goldman Sachs signals four such actions in the current year.

Read: Inflation and geopolitics in the week ahead

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